Lutfur Rahman (Ind) has been elected mayor of Tower Hamlets LBC, seven years after he was ousted when an electoral tribunal found he had engaged in corrupt and illegal practices.
He beat Labor incumbent John Biggs by more than 7,000 votes on the second ballot.
Mr Rahman narrowly missed being elected in first-preference votes after winning 39,533 votes in the first round, compared to 27,894 for Mr Biggs.
The result is a second major disappointment for Labor in the capital announced this afternoon, after losing control of Harrow LBC to the Tories.
They had started the day celebrating after taking on the Tory flagships of Westminster City Council and LBCs of Wandsworth and Barnet.
The Evening Standard reports that Mr Biggs said: “This is a game-changing result and although I am obviously disappointed, I have to graciously accept it. I am proud of our many accomplishments, but it clearly reflects a desire for change. I worry about divisive community politics, but the new mayor must seize the moment and keep the promises he made.
“It was a great day for Labor across London and our local result shouldn’t diminish that.”